Budget 2023: Outstanding government guarantees at 17.8% of GDP

PETALING JAYA: Total outstanding government guarantees (GG) as at end-2022 was estimated at RM317.6bil or 17.8% of GDP (2021:RM310.4bil, 20.1%).

The GG were for issuances by companies like Danainfra Nasional Bhd, Prasarana Malaysia Bhd and Malaysia Rail Link Sdn Bhd (MRL) and meant to finance ongoing public transport infrastructure projects, finance housing loan facility for civil servants, PTPTN to fund education loans as well as Felda's restructuring and rehabilitation exercise.

Some loan guarantees which require financial assistance such as provisional allocation for projects during construction or initial stage of operation, working capital assistance and interest repayment, are classified as committed guarantees.

As at end-2022, committed guarantees was estimated at RM205.9bil (2021: RM197.3bil) due to new financing obtained by existing entities such as MRL, DanaInfra and Prasarana for ongoing projects.

1MDB remains a burden despite total outstanding debt having been reduced to RM18.2bil as at end-2022 (2021: RM32.1bil) following the debt redemption for both 1MDB Energy Ltd in May 2022 and 1MDB Energy (Langat) Ltd in October 2022 utilising funds from the Assets Recovery Trust Account.

The Trust Account balance as at end-2022 is estimated at RM1.9bil and will be utilised to cover projected interests for remaining debt principals, the government report noted.

The redemption of 1MDB Global Investment Ltd bond in March 2023 amounting to US$3bil (RM13.3bil) is allocated in the 2023 Budget.

The redemption of 1MDB final debt principal of RM5bil will be due in May 2039.

Other liabilities as at end-2022 include commitments for public private partnership (PPP) projects and financial obligations of private finance initiative (PFI) projects amounted to RM142.2bil (2021:RM151.1bil).

There are some 105 ongoing PPP projects with an estimated commitment of RM92.1bil (2021:RM97.8bil), whereas outstanding PFI liabilities were estimated at RM50.1bil (2021:RM53.3bil).

The PFI projects include refurbishment of schools, universities, training centres as well as repair and maintenance of federal government buildings.